Drumbeat: January 28, 2010

BEIJING—China's economic planning agency predicted that international oil prices will average $80 a barrel this year—about 25% higher than last year—reinforcing analysts' expectations that Chinese demand will continue to help push prices up despite concerns that recent credit-tightening moves could crimp its appetite for fuel.

The forecast by the National Development and Reform Commission, reported Thursday by China's state-run Xinhua new agency, suggests Beijing sees room for oil to rise above its current level of around $74 a barrel. The agency said prices will be supported by economic recovery and loose monetary policy that increases investment in futures markets. It said $80 per barrel would suit "healthy" development of China's oil industry because it would allow oil refiners' to make a profit but not hurt consumers.

(Bloomberg) -- Saudi Arabian Oil Co., the world’s biggest crude producer, is exporting about 1 million barrels a day to China, more than to the U.S., Chief Executive Officer Khalid al-Falih said.

“We are already exporting more to China than to the U.S.,” he said today in an interview in Davos, Switzerland. “We are prudent and careful about where to invest but our eyes are focused on China and we will continue to look for all opportunities.”

The war of words between the Obama administration and the oil industry continues.

For months, Ken Salazar, the Interior secretary, and Jack Gerard, the president of the American Petroleum Institute, have been involved in a tit-for-tat over the administration’s energy policies. The oil industry says the administration has been slowing, or delaying, many lease sales and hampering the development of oil and gas resources around the country.

“It’s a zone that interests us a lot but the terms are difficult,” Jean-Jacques Mosconi, head of strategy and economic intelligence at Total, said today in an interview in Paris. “Our potential on Carabobo is limited,” he said. “Conditions are not there to create an attractive project for Total.”

TWO years ago, oil-rich Angola was reckoned to have one of the world’s fastest-growing economies. In both 2006 and 2007 real GDP had surged by around 20%, and double-digit growth rates were widely predicted for at least the next five years. Then oil prices crashed with the global recession. Last year the economy is estimated to have grown, at best, by 1.5%. But it is bouncing back. Some say Angola will be among the world’s top five performers again this year, with growth exceeding 8%.

Levels of radioactive tritium have risen rapidly in recent weeks in the groundwater surrounding Vermont’s sole nuclear power plant, leading both longtime supporters and foes of the reactor to question whether it will be allowed to keep operating.

Owners of the Vermont Yankee plant, along the Connecticut River just north of the Massachusetts border near Brattleboro, are seeking a 20-year extension of the plant’s operating license, which expires in 2012.

But the rising radiation levels, an indication that reactor water is leaking into the soil, have stirred deep concern about the plant’s safety and the credibility of its operators.

WASHINGTON – President Obama is taking his job-creation message from the State of the Union address on the road Thursday as he travels to Florida to announce the awarding of $8 billion in high-speed rail projects designed to improve or create service in 13 major corridors across the country.

There’s been an ongoing attack on the credibility of federal climate monitoring efforts that has been partly inspired by Anthony Watts. In 2007, Mr. Watts, a former TV weather forecaster, began recruiting legions of volunteers across the United States to inspect the thousands of weather stations — some in people’s back yards or in parking lots — that have for generations produced the raw data feeding into federal and independent efforts to track climate trends. The result was SurfaceStations.org. Its rogues gallery of photos of particularly suspect weather stations has been credited by many meteorologists and climatologists as a wake-up call for the need for better monitoring....

Now, though, a new study by Matthew Menne and other scientists at the National Climatic Data Center, the federal office charged with tracking climate trends, directly challenges the underpinnings of arguments that Bad Weather Stations = Faulty Climate Conclusions. In essence, the paper, On the Reliability of the U.S. Surface Temperature Record (pdf), concludes that the instrument issues, as long acknowledged, are real, but the poor stations tend to have a slight cool bias, not a warm one.

At a meeting of oil leaders at the World Economic Forum at Davos, Tony Hayward, group chief executive of BP, said that there was a “supply challenge” for the industry which would have to increase output to 100mbd - a new peak for oil. Mr Hayward said that at present the world was producing between 83 and 84mbd.

He said he hoped Iraq would become a major oil player, producing up to 10mbd in the next decade if the political situation remains relatively stable.

A need for a new peak in oil production will dismay environmental campaigners who hoped that the West’s declining reliance on oil would mean less CO2 emissions. Instead, demand from the emerging economies, including India and the other BRIC countries, China, Russia and Brazil, will lead to new record levels of consumption.

This month Iraq will finalize contracts with the likes of ExxonMobil Corp., Royal Dutch Shell PLC and BP PLC to develop some of its biggest oil fields. These giants are among the world's last remaining pockets of so-called "easy oil." They don't require ultradeep drilling or innovative production techniques, just the application of Big Oil know-how. No wonder the oil companies agreed to develop Iraq's fields without even getting an ownership stake in the fields and collecting as little as US$1.15 per barrel recovered.

Given the size of Iraq's undeveloped giants, there are no technical reasons why within 10 years the country can't supplant both Iran and Russia to become the world's No. 2 oil producer after Saudi Arabia. No wonder Iraq holds three of the top 10 fields of the future.

Iraq plans to almost quintuple its oil production capacity by 2017, which could be enough to overwhelm expected demand growth and weigh heavily on the oil price. But will Iraq achieve its ambitious targets?

(Bloomberg) -- Morgan Stanley, which charters more oil-product tankers than Chevron Corp., is shipping a jet-fuel cargo 11,500 miles across the world’s biggest ocean to Florida, two people familiar with the matter said.

The bank hired the Torm Carina to carry the fuel to Port Everglades, according to the people. The vessel was previously in South Korea and Taiwan, ship-tracking data show. It can carry about a fifth of all the jet fuel imported into the U.S. East Coast from South Korea, Taiwan and China last year. Hugh Fraser, a spokesman for Morgan Stanley in London, declined to comment.

City commissioners Thursday night discussed for the second time their position on offshore drilling in the Gulf of Mexico, a proposal opposed last year by nearly every coastal city across Tampa Bay.

Yet Dunedin City Hall still has adopted no official stance on drilling, partly due to a draft resolution written by City Attorney John Hubbard that commissioners saw as weak, vague and outdated by months.

resident Hugo Chavez of Venezuela, faced with serious electricity and water problems, has asked Brazilian president Luiz Inácio Lula da Silva for help. Venezuela has gone through a devastating drought that has forced water rationing - some areas of Caracas go 48 hours without water - and rolling blackouts.

Presently, we are facing a formidable energy crisis which has almost paralysed our social and economic activities. Electrical outages are the order of the day and the nation is suffering from the ongoing load shedding of almost eight to 16 hours a day. We are facing a shortfall of 4000 MW in the present winter and the situation is expected to further deteriorate during summer, as the energy demand is bound to increase with the increase in the environment temperature. Unfortunately, the crisis is prevailing in a country that is abundant in primary energy resources and has vast hydel, solar and coal resources, but the exploitation of these resources is dismally low.

With more than 40 percent share in the world's electricity generation, coal is considered as an important fuel for energy production. According to the estimates made by International Energy Association, world crude oil resources may deplete in half a century and natural gas in around 70 years, whereas coal may last for two centuries. This is because many countries are seriously considering using coal for electricity production.

The conversation about community that’s unfolded in the peak oil blogosphere over the last couple of weeks has quite a few interesting features. Perhaps the most interesting, at least to me, is the unanimity with which so many voices, coming from so many different viewpoints, have agreed that the role played by ordinary Americans in the collapse of American community is that of passive victim.

That unanimity, it has to be said, does not extend much further. Any number of circumstances, and no shortage of malevolent schemes, have been offered up as the reason why Americans have had their communities taken away from them. Still, the Archdruid Report post that started the recent conversation made an entirely different suggestion: that Americans, by and large, had not “had their communities taken away from them” at all, but actively walked away from their communities, and in fact continue to do so. It’s the fact that this suggestion is apparently about as welcome as a slug in a garden salad that fascinates me.

"The globalization we had dreamed of at the outset was of the kind where, instead of taking from others by means of monetary, social, fiscal or ecological dumping, each of us would found development on social progress, increased purchasing power, reduced inequality, improved standards of living, health and education. . . . By prioritizing short-term logic, we have paved the way for our entry into a time of scarcity. We have exhausted non-renewable resources, devastated the environment, caused global warming. Sustainable development cannot be achieved if profits up front and dividends for shareholders are our sole criteria."

Statistics from cultures undergoing major crises seem to bear out the assumption that often, women adapt better than men to many difficult situations. The decrease in lifespans in the former Soviet Union that accompanied the collapse was in part due to loss of health care, but a lot of it had to do with rises in suicide rates, stress and alcohol abuse. At one point, the division between lifespans for women in Russia and for men was more than a decade. In Studs Terkel’s Hard Times and Jeane Westin’s Making Do: How Women Survived the 30s, we hear story after story of men who simply couldn’t handle the strain of unemployment and dependent family, the destruction of his role, and left, or subsided into alcoholism.

This does not mean that every man facing a transition into a poorer, less energy rich world is doomed to crisis. But I think it is important to talk about – because just as I’ve written many times about the changes that peak oil and climate change and their economic consequences are likely to bring about for women, the ones that come for men are important and real.

Ten years from now, in 2020, when we try to look back, Indian agriculture can be transformed into a healthy and vibrant system where farmer suicides have been relegated to history, where distress and despondency has been replaced by the lost pride in farming, where agriculture becomes sustainable in the long run, and does not add on to global warming.

Barack Obama put himself firmly behind the effort to get a climate change bill through Congress last night – but said it must include a new generation of nuclear power.

The brief passage on energy and climate in Obama's state of the union address did deliver the signal Congress and much of the world had been seeking that the White House is ready to throw itself into the effort to pass legislation.

To the agreement of those present, speakers quickly outlined the problem. In a nutshell, the world is dangerously close to "peak everything" - oil, coal, natural gas, water, minerals, soil, phosphorous, fish, and perhaps the most important of all, the capacity of the atmosphere to absorb more carbon without triggering off life-destroying phenomena. Problem two is the financial collapse from efforts by too many governments to spend their way out of recession. The final phenomenon that will force changes, is that there is no sign that mankind is about to make the efforts required to stop spewing carbon into the already saturated atmosphere. Without at least some moderation, it is likely that the atmosphere eventually will have its revenge by raising global temperatures so much that there will be no higher forms of life left.

Absent from the meeting was any representation from our political leadership who are currently busy:1) denying there is a problem; 2) trying to spend our way out of the recession; or 3) simply overcome by the pace of events and do not want to rock the boat by speaking publically on such matters before the next election.

The head of the world's biggest producer company was speaking at a World Economic Forum session on the global energy outlook in Davos. 'We don't believe in peak oil,' he told reporters later.

But other petrol bosses remained unconvinced. 'The problem of peak oil remains,' said Thierry Desmarest, chairman of French giant Total. Mr Desmarest said it would be very difficult to raise oil production worldwide above 95 million barrels a day, which is 10% more than today's level.

DAVOS, Switzerland (Reuters) - New technologies to extract gas from shale rock have altered the U.S. energy outlook for the next 100 years, Tony Hayward, chief executive of BP, said on Thursday.

Energy chiefs speaking at the World Economic Forum differed about the prospects for future oil supplies -- with Iraq placed to account for up to 10 percent of that -- but agreed new "unconventional gas" would be a huge fillip.

The hydraulic fracturing process carried out in horizontal shale gas wells has had a lot of criticism for its environmental record. The process is very water-intensive and there are many claims that it can contaminate nearby drinking water. The Texas Commission on Environmental Quality, meanwhile, has carried out a study into air pollution from 94 oil and gas sites in the Barnett Shale area of Northern Texas - all within half a mile of residential areas - and found elevated concentrations of benzene, a known carcinogen, in several places.

“We see long-term growth there; we have seen even during the crisis some demand growth in China,” Chief Executive Officer Khalid al-Falih told reporters in Davos, Switzerland, today. “We are certainly optimistic about continuing demand increases and we will continue to supply China with the required petroleum as well as looking at investments.”

The peak oil theory is simple on the surface: Over the long haul, oil supplies will diminish. Production rates will reach a peak and then decline.

However, the simple Hubbert Curve doesn't account for the addition of new hydrocarbon provinces (i.e. deep offshore, Kurdistan) or technology improvements. One only need to look at the North American natural-gas price to see a glaring example of how technological innovation (shale gas production) can disrupt supply forecasts.

“The challenges of execution on the ground and the need to build capability on the ground will mean that things will happen a little slower than all of us are perhaps planning on today,” Hayward said in a discussion at the World Economic Forum in Davos, Switzerland. Still, “There’s no reason to believe Iraq can’t be producing 10 million barrels a day by 2020 or so.”

(Bloomberg) -- The European Union must get “serious” about its Nabucco pipeline to compete with Russia’s OAO Gazprom for Caspian natural gas, Azeri President Ilham Aliyev said.

Nabucco, the EU’s largest cross-border infrastructure project, is bogged down over financing, pricing and politics, Aliyev said in an interview with Bloomberg Television late yesterday at the World Economic Forum in Davos, Switzerland.

The law may force Electricite de France SA, Europe’s biggest power generator, to sell as much as 120 terawatt-hours a year to competitors, about a third of its French reactor output. The blueprint, initially planned to be put before parliament at the end of last year, was unveiled by the government to industry last week. It’s designed to open up the power market, addressing antitrust concerns of the European Commission.

While the U.S. government chose not to increase funding for HIV/AIDS last year, it tripled the budget of AFRICOM, the U.S. Military Command in Africa established in 2007 under former president George W. Bush. Africa policy experts point to this shift as a clear indication of the militarization of U.S. foreign policy in Africa.

AFRICOM is supposedly designed to give humanitarian support to African people. But in reality, says the report, "Africa has never been the intended beneficiary of AFRICOM," noting that U.S. military efforts on the continent seem to be linked most closely to oil and other economic interests.

U.S. military teams and intelligence agencies are deeply involved in secret joint operations with Yemeni troops who in the past six weeks have killed scores of people, among them six of 15 top leaders of a regional al-Qaeda affiliate, according to senior administration officials.

SAN JOSE, Calif. — Solar and wind power may get the headlines and attention, but green-tech experts say 2010 will be dominated by energy efficiency, the mundane but critical process of cutting the amount of gas and electricity that homes and offices use.

For years, the promise and hype surrounding electric cars failed to materialise. But as this year’s Detroit auto show demonstrated, major car companies and well-funded startups - fueled by federal clean-energy funding and rapid improvement in lithium-ion batteries - are now producing electric vehicles that will soon be in showrooms.

Electric cars are a green movement that is finally moving. Shunted to the side as the public indulged its love affair with gas-guzzling SUVs and four-wheel-drive trucks, history has finally caught up with the plug-in vehicle.

NEW HAVEN — A freelance writer and translator like me can’t afford a guy like Bernard Brennan. But after a brief meeting with him, I was on my way to a Web site and business cards. I paid him in SHARE (Self Help and Resource Exchange) hours. Some I got by becoming a new member of the bartering network; some by supplying members’ demands for proofreading and editing.

In the time bank world, everyone’s hour of service is equal: Members can trade crochet lessons for roof repair or a ride to the airport for a massage.

(Bloomberg) -- President Barack Obama, whose efforts to cap greenhouse-gas emissions have stalled in Congress, said even lawmakers skeptical about climate change should back the legislation to help the U.S. economy.

“Here’s the thing: Even if you doubt the evidence, providing incentives for energy efficiency and clean energy are the right thing to do for our future,” Obama told Congress in last night’s State of the Union address. “The nation that leads the clean-energy economy will be the nation that leads the global economy, and America must be that nation.”

It looks to me like a polite enquiry from someone concerned about climate change. Delingpole, however, saw it as a "nauseating email" which must have come from a "disgusting eco-fascist organisation", though he didn't know which organisation this might be. His post was headlined "Conservative candidates stalked by eco bullies". Much worse, he published the man's name and home address.

Delingpole's bootboys took the hint and immediately swung into action. Within a few minutes of the comments opening, they had published the man's telephone number and email address, a photo of his house ("Note all the recycling going on in his front garden"), his age and occupation. Then they sought to tell him just what a low opinion they had of "stalking" and "bullying".

What's wrong with the IPCC? To some degree, it's a victim of its own size. In a group as large as the IPCC, producing climate assessment reports in excess of a thousand pages — exclusively with voluntary labor — errors are going to be inevitable. Humans make mistakes and the IPCC has owned up to its error, says Richard Somerville, an atmospheric scientist at the Scripps Institution of Oceanography and a lead author on the 2007 IPCC report.

"Policymakers must understand that unlike a steel tariff, action on climate change is not something that can be postponed a year," said Richard Somerville, a research professor at Scripps Institution of Oceanography and co-author of the Copenhagen Diagnosis, a synthesis of the most policy-relevant climate science since the 2007 IPCC report. "The longer we delay in reducing our emissions, the higher the global temperature increase we lock in."

This winter's extreme weather — with heavy snowfall in some places and unusually low temperatures — is in fact a sign of how climate change disrupts long-standing patterns, according to a new report by the National Wildlife Federation.

New NASA-led research shows that the melt season for Arctic sea ice has lengthened by an average of 20 days over the span of 28 years, or 6.4 days per decade. The finding stems from scientists' work to compile the first comprehensive record of melt onset and freeze-up dates -- the "melt season" -- for the entire Arctic.

Climate change may be an “accelerant of instability” in future conflicts, and the U.S. military needs to plan for possible environmental catastrophes and resource wars, according to the Pentagon’s soon-to-be-released master strategy document.

The crew at Inside Defense (subscription only, sorry!) got their hands on a “pre-decisional” draft of the 2010 Quadrennial Defense Review, the congressionally mandated, once-every-four-years review of defense policy. The much-anticipated document, slated for release on Monday, is supposed to be a broad “statement of purpose” for the Defense Department. Defense contractors, policy wonks and other national security types will be reading it closely for any possible shift in priorities.

Among other things, the draft QDR suggests the military will have to start planning for operations in which rising sea levels, an ice-free Arctic and higher overall global temperatures may be an important factor. What’s more, it suggests that military planners will have to prepared for the knock-on effects of climate change: forced migration, resource scarcity and the spread of disease.

It's certainly a good thing that we can count on the magical, non-depleting, oil fields in Saudi Arabia. Recent Saudi net oil export numbers, as annual oil prices went from $26 in 2002 to $57 in 2005 to $100 in 2008 (EIA):

From 2002 to 2005, average annual Saudi net oil exports increased at 57 mbpd/year for every dollar increase in oil prices.

From 2005 to 2008, average annual Saudi net oil exports declined at 20 mbpd/year for every dollar increase oil prices.

If one resides in the oil industry leg of the Iron Triangle, and if one has concluded that Peak Oil is upon us, or extremely close, does one say, "We cannot increase our production," and thereby encourage massive conservation and alternative energy efforts, or does one say "We choose not to increase production and/or we are temporarily unable to increase production for the following reasons (fill in the blank)?"

The latter course of action would tend to discourage emergency conservation efforts and alternative energy efforts, and it would encourage energy consumers to maintain their current lifestyles, perhaps by going further into debt to pay their energy bills, and it would in general have the net effect of maximizing the value of remaining reserves.

The article spouts the kind of bad logic nonsense that I take on so often in comments here.

The author fails to understand that Peak Oil is about conventional oil only. Hubbert based his thesis on historical data that shows how conventional oil wells deplete.

There were no deep offshore wells at the time unless I'm mistaken. These wells are really outside the realm of conventional oil because their cost makes them problematic since the oil may end up being non economic to recover. Getting it out may cost more than it can be sold for unless there is a large permanent price spike which is the likely outcome of Peak Oil anyway.

Then he jumps to a completely different form of energy, natural gas, and uses it as a basis for criticizing Peak Oil theory. Totally illogical. Just because two things come out of holes in the ground does not mean they are related. Why not use water wells as a basis for dissing Peak Oil if this is valid logic? They are well know to renew themselves.

Natural gas (methane) is not the same as oil. It is different. It is used differently by the structural mandates in place. It has a different price. And it can be made from manure processing and such which makes it a borderline renewable in some cases.

True someday with adequate change in structural mandates natural gas could mitigate/delay the consequences of Peak Oil but it can not be used to disprove Peak Oil theory.

Then he goes on to use enhanced oil recovery to dis Peak Oil. To him enhanced oil recovery has no limits evidently. It can forever push more oil to the surface and has no limitations such as cost or pollution implications.

It is odd he does not mention the later since he wants to use enhanced natural gas recovery to dis Peak Oil but fails to mention that recent fracturing of shale for natural gas is polluting water supplies in the area. Perhaps that would knock down his thesis so he just leaves it out.

Always look for the things that are left out of an argument. Just because they are left out does not mean they are unimportant. They are usually left out for a reason and that reason is that it disproves or contradicts the argument.

"Just because two things come out of holes in the ground does not mean they are related. Why not use water wells as a basis for dissing Peak Oil if this is valid logic?"

You're right. Gophers also come out of holes in the ground, and should never be confused with useful energy sources.

.. But the fact that Gas and Oil can both heat buildings, produce electricity, drive factories and run vehicles IS something that makes them related. It doesn't make them IDENTICAL, but it does put them into the same corner of the same room.

Everyone else is probably wondering why do I still bother with this point.. I guess it's claw-sharpening. But really, X, this comparison thing is really hard to figure. You DO post some great comments, but your Reasoning here makes no sense to me.

Point taken Bob, but do you think natural gas has any real hope of replacing liquid petroleum? If so what would be the consequences? How much natural gas would we need just to replace the liquid petroleum we now import?

The Oil Drum, (heading out) did a thread on this in November of 2005.Gas fields also deplete, but faster
I think, with the advent of all this new shale gas, we could use another special thread on the subject.

Gas fields deplete faster and I have been told that Shale Gas Fields deplete a lot faster. However I don't have any data on shale gas depletion rates. If anyone does please post the link. The point is if we converted our fleet to natural gas we would be at the mercy of fields drilled this year? I can imagine the panic that would cause.

No, I don't think anything will bring us back up to our BOE/capita of yesteryear.. Unless that 'capita' comes way down, of course.. and it may well.

I really don't know Gas production or prospects enough to say, in fact.. I'm really just basing that in trust with the gist of the discussion I read here, no less than I place what trust I can in the Climate Scientists I read and know personally to take a reasonably protective stance on my climate position. (ie, Failure Mode. They're convinced, so I'd better keep listening to them and try to get ready and act accordingly)

I was merely pointing out that they are both energy sources with many translatable uses. I don't get the sense that X would allow any comparison of Red Delicious to Macintosh, based on some principle I haven't really deciphered yet.

He said,

..Then he jumps to a completely different form of energy, natural gas, and uses it as a basis for criticizing Peak Oil theory. Totally illogical. Just because two things come out of holes in the ground does not mean they are related.

.. when it would seem that not only are they related as moderately interchangable heat and power sources, but in fact, the (apparent) abundance of NG that is supposed to be disproving PO, is in fact ALSO a diminishing and limited source, and so will do more to both SUPPORT the PO alarms, as well as add one more relationship between them that should convince 'X' that a comparison is both apt and necessary.

So I'm still just tickled at how confuddled his point continues to be, which is why I bother to keep begging him for some kind of deeper explanation.

CNG car sales growth in excess of 40 percent in a developing nation is a sign of economic growth fueled by a switch to cheaper fuel. Build a car that costs less to operate, and some people will be interested.

Traditional economic substitution makes the assumption that a good or service has a substitute either inferior or superior and price will cause the substitute to replace the original good or service.

However we also have something called chemistry as a simple example there simply is no substitute for water.
Thus you cannot use traditional economics to model water. Now you can build desalination plants, drip irrigation etc etc and minimize your water usage but for chemical reasons it simply is not substitutable in the economic sense.

This is important because I argue oil also has these properties the value of liquid fuels lies in their chemical properties just like water therefore they are also have no viable economic substitute.

People confuse efficiency gains with substitution. Moving to NG does not substitute for oil but increases our efficiency in using oil thus it does not lower the demand for oil. The same with water more efficient use of water never drops demand below all the water available it simply ensures that demand can afford the higher prices via conservation.

Some times I call NG a partial substitute for oil and I've been using that term for a while but its in a sense wrong because it gives the illusion that you have substituted where thats not whats actually happened what you have done is allow oil to be used in uses cases that can afford it.

Sure this slows the price rise for a while as the absolute volume drops as efficiency gains offset falling supply however since we don't have true substitution but instead only efficiency gains you don't stop the steady increase in prices as the intrinsic demand at any price is higher than supply once you start the downward spiral of efficiency gains because its not true substitution.

Another trivial example is electricity does not have a viable substitute in many use cases you either have it or you don't demand can become more efficient but its fundamentally absolute with no possibility of substitution.

Why is this important ?

Well we can take the case of water. For water a person has to drink a certain amount every day to live.
The exact amount is controversial but lets say a few liters. After this you die. Obviously water demand hits a intrinsic wall. Of course in real life its much higher for long term habitation. But these fundamental unsubstituted substances all have and underlying hard demand level.

For oil its not as defined but if its in this class then it behaves in the same manner. Efficiency gains eventually bring supply up against a fundamental demand level and price cannot induce any further conservation. Thus you get true demand destruction i.e demand dies. If its water then demand falls via the death of the people demanding water. If its oil its a bit more complex but same underlying result eventually the source of the demand dies aka people. This of course assumes oil is intrinsic in these people being able to live just like water. But this makes sense because the reason these chemicals have no substitute is eventually because their chemistry is needed for survival.

Obviously to prevent this you have to de-oil your society we lived before with little oil we can do it again.
Of course this will uncover the tight coupling between oil and population levels but that just proves the point and thus to power down you must also depopulate. This can be done with dignity or not.

Of course many will reject this and claim that NG or EV's or this or that is a valid substitute and oil is not in the same class as water but what if they are wrong ?

The entire alternative energy field is based on the concept that substitution is viable. My opinion is its fundamentally flawed with a basis thats simply wrong.

Thats not to say some society can't use other energy sources besides oil but it does say that its impossible for our oil based society to substitute its way into one thats not based on oil as oil it self is not substitutable. Thus alternative energy is a certain failure in our society as its simply fundamentally wrong.

The part about natural gas providing a way for oil to be used where its most valuable is perfectly fine by me...but in this case I think it's a stretch to say that we are anywhere near the point where oil is not substitutable on a chemical basis. There is truly a lot of it left.

I think the usual suspects are sufficient to model this stage of the decline: EROEI, time to transition infrastructure, and so on.

Of course if we get a cascading failure and are dropped back 200 years, then we quickly get to the point where your thesis might play a role. However, although I expect a financial collapse, the economy will adjust — just at a much, much lower level of activity.

Again look at water. You don't have a water crisis because the world runs out of water indeed water is basically never really consumed and for the most part can be treated as a perfect recycle loop.

Thus your argument fails in this sense because the basic premise I used i.e water is not in overall short supply.

The distribution of water and of course if its salty or pure is the issue.

This suggest oil should follow the same dynamics with the total amount being of little importance and distribution predominate.

Indeed WT's export land model suggests that the distribution of the future oil supply has far more impact than just the change in aggregate amount. Thus whats "left" is actually not really important at all. As the total could even be constant aka water and you still hit the wall.

As far as EROI goes its a symptom as I posted below of the intrinsic nature of oil.

And as far as the financial situation goes well thats like claiming someone shot with a bullet through the heart died of heart failure. Sure the heart failed but the bullet was the problem. Of course our financial institutions will collapse before the oil problem grows much beyond a bullet. The fact we never really reach the "end" where our oil based society continues to function till it hits the final limit of intrinsic oil demand does not mean that limit does not exist.

Also its best to think of it as a sort of slope not a wall that gets steeper overtime. Well before you hit the peak the slope simply becomes so steep the system fails. As in my water example well before a community is reduced to only enough water to drink to survive it abandons the place to seek more water. All kinds of other critical uses for long term survival become a factor well before you hit the physical limit.
Food obviously.

The actual transition point is not well defined however it makes sense that and economic collapse precedes the final collapse. Think of it as a pre-shock before the big one. Historically economic collapse because of environmental stress such as droughts did not precede the final societal collapse by much often only a few years pass from the time of drought induced economic collapse before the society itself begins to collapse.

For oil it seems that its a two phase collapse the first bought of high prices stopped expansion and contracted the economy some. Eventually continued collapse of our ability to distribute oil results in another bought of high prices but I'd argue this second round starts the societal collapse phase as you no longer have the stopping of growth to act as a buffer.

Now what cause distribution of oil to be a problem. Well export land of course. More difficult to extract reserves, economic uncertainty, even alternatives play a role as they are mistaken as valid substitution.
Outside of the role that the total amount remaining of oil plays in ensuring that the maximum distributable amount is declining it really is not important.

In fact if you recognize this then you realize that distribution has been a problem for oil from day one.
The real or fundamental problem has not changed at all and its been with us since the day we started producing oil.

Same of course with water in and arid region it does not matter how much water they have if it needs distribution its a problem. The only difference is of course once supply actually declines in the case of both oil and watter you move to the end game dynamics based on distribution of a declining unsubstituted critical resource until the society itself collapses at some point as it attempts to climb the slope of intrinsic demand and lack of real substitution.

For water its obvious that the amount of water available controls the population level less so for oil but I say its the same thus you will obviously reach a point where the population itself must decline to that supported by the resource. Perhaps alternative societies that can support the same population levels without oil are possible but thats far from clear. In fact the chances of such a society forming as the oil based one collapsed seems far fetched. Programs to drop population would probably have been needed almost from the start. Growing your population using a resource thats certain to decline seems to be a pretty sure bet that you will collapse.

So no I don't expect us to ever actually reach the point that the actual supply of oil is and issue its just the bullet that punctures our heart. I do expect everyone to claim we died of a heart attack and never recognize the real source of the problem which was distribution of oil forced into its end game mode once supply contracted. We have been dodging the distribution bullet if you will from the day the first barrel was pumped the peak in production simply stopped the dodging and we got it right in the heart.

Actually using this metaphor we took a gut shot when the US itself peaked that resulted in a slow bleed but as I said our killer which is distribution has been with us all along. Small wonder few believe we are now dying.

Dropping population levels in Japan (down 130,000 people in 3 years and accelerating declines in progress). More suicides (over 30,000 every year for 12 years and mostly this is economic).

Size of auto fleet in the US down 4 million last year. Never went down before. Suddenly! (Well....not sudden for us TODers who were totally expecting this). How long before the US also gets (human, not just auto) population declines?

Obama is trying vague minor (read:hopeless) measures to prop up the middle class. The SOTUS had as its theme "don`t give up hope! Please! It seems rough but have some faith!" I grasped an underlying desperation there.....

And just watch Greece implode. And how about Spain?

What is so hard about grasping the consequences of PO and stepping up to meet them (by knocking down abandoned buildings in order to make farms everywhere where they can be made, starting a focus on small scale production, etc.)? The energy that has been powering all the movement of massive, heavy objects from inception to waste product and all their amazing and quick motions in-between is disappearing. And so the massive heavy objects can`t be moved around anymore. It is so simple but everyone is, like, wondering, "Hey why is demand for airline seats down so much??"

So, yes, PO has really ended a way of life that many people got comfortable with.

Now what cause distribution of oil to be a problem. Well export land of course. More difficult to extract reserves, economic uncertainty, even alternatives play a role as they are mistaken as valid substitution.

memmel, interesting posts. Your point of 'alternatives are mostly more efficiency and no substitution'. Take f.i. EV's. Is your point that as long as CE-cars are sold in much bigger quantities than EV's it makes little sense, in other words the transition goes so slowly that economic and societal collapse will come long before real substitution has taken place ?

Basically yes. EV's will fill a nich market where they work but not displace CE therefore it makes sense to view them as and efficiency gain not as a substitution. Oil usage remains at the same level as supply as the market that can't use EV's continues to expand. You did not actually substitute you made a efficiency gain which allowed further growth. The problem with efficiency gains is they follow the path of diminishing returns.
In effect they just kick the can down the road a bit more.

Actually substituting for oil would require massive infrastructure rework. And not as far as energy goes all examples I have of robust cultures show a steady substitution of a better higher quality energy source for a lower quality one. Even the move from oil fired Electricity to NG where it works is a quality substitution once the infrastructure costs are covered. NG is cheaper per btu and a better fit for fixed power plants where it works. Notice that we still have a significant amount of oil fired electricity globally where NG is not a viable substitution. So it also acts like a efficiency gain not a true substitute. I've called it partial substitution in the past but the behavior is identical to and efficiency gain therefore if it walks like a duck and quacks lie a duck its a duck. Very closely related is of course the fact the real problem is distribution of oil if you look you will see the move to NG happens only when oil distribution becomes problematic and the NG resources exist to be utilized not before. Well to some extent england went coal->ng insteand of coal->oil->ng for electricity but thats not really and exception.

The open issue of course is if we are only doing efficiency gains when do we hit the wall ? Because its certainly there. I'd argue given the nature of EV's and reasonable expectations of there uptake during and effective depression we are there now.

For me it ALL boils down to EROEI. Substitution will occur whenever it is convenient and remain that way until it is not.
We should not complicate a simple premise.

Energy is energy.
If NG was free and abundant, would there ever have been a great need for oil?
If electricity was free an abundant, would there ever have been a great need for oil or NG?
If ethanol was ethical, cheap and convenient it no doubt would be a primary energy source.

We have progressed along the EROEI path from human power, animal power to steam, electricity oil and NG. Whenever we find a greater energy return for our energy investment that is the path we follow....and we substitute.
Decreasing EROEI is the wall of finality for economies and the human way of life.

EROI is certainly part of this concept we are not towing icebergs to Saudi Arabia for example for water.

Oil is simply a slightly fuzzier variant of water but follows the same basic fundamentals. EROEI concerns are very much included in the concept and indeed they are a result. If a substance actually had a real substitute then rising prices would ensure substitution well before EROEI became a issue. In fact the fact that its a potential issue itself suggests that what I'm saying is correct. I don't have and easy proof of this but I think you can see that its intuitive that true substitution would never even approach the EROEI limit.

As a sort of example consider coal. After a certain point Englands population had grown to the point that it could not support its society without coal. It simply could not go back to wood. Because of this it continued to expand coal production despite the fact that EROEI was declining for the deeper mines. Of course given total production was increasing more energy could be devoted to the deeper more expensive mines. Steam engines etc.
Oil actually worked as not only a true substitute for coal but a better one for many uses and coal was quickly abandoned. You can use the fact in this case where real substitution was viable that the original resource was abandoned well before exhaustion to realize that it had already been exploited well pass economic concepts of substitution and was a critical element to staying alive. If it was substitutable then one would think that instead of oil that the society would have reverted back to sustainable wood as the easily accessible coal was exhausted. At some point the costs of expanding the coal infrastructure could have theoretically been substituted with a return to renewable wood that was cheaper to harvest. But the society itself was already past the point of no return i.e it could no longer go back. Assuming I'm right and oil really does not have a viable substitute then we will suffer the fate that coal based England would have suffered if oil had not saved the day.

Traditional economic substitution makes the assumption that a good or service has a substitute either inferior or superior and price will cause the substitute to replace the original good or service.

However we also have something called chemistry as a simple example there simply is no substitute for water.
Thus you cannot use traditional economics to model water.

For oil its not as defined but if its in this class then it behaves in the same manner. Efficiency gains eventually bring supply up against a fundamental demand level and price cannot induce any further conservation. Thus you get true demand destruction i.e demand dies. If its water then demand falls via the death of the people demanding water. If its oil its a bit more complex but same underlying result eventually the source of the demand dies aka people. This of course assumes oil is intrinsic in these people being able to live just like water. But this makes sense because the reason these chemicals have no substitute is eventually because their chemistry is needed for survival.

Of course many will reject this and claim that NG or EV's or this or that is a valid substitute and oil is not in the same class as water but what if they are wrong ?

The entire alternative energy field is based on the concept that substitution is viable. My opinion is its fundamentally flawed with a basis thats simply wrong.

Bravo! Most excellent and powerful analogy, one that cuts to the heart of the matter IMO. At some point, Bartlett et al understand that there are limits, namely population and resources. Now Mike, tell these nice people here where this idea germinated from : ) You know, liquid nitrogen cooling (a lack of new cooling capabilities) and a lack of new energy sources...

Yes Don actually it was Don that nailed it. I realized this when I was talking with him about cooling.

The process of cooling is a simple physical process based on removal of thermal energy. Most of the methods used to cool things where discovered rapidly in the 1800's and we have not done much better since. Basically only a few fundamental ways to cool stuff and simply no silver bullets. Now there are a few esoteric methods discovered since then that can make use of electricity, magnetism or light but the operate under the same basic laws that thermal pumping has to occur.

Somehow Don mentioned oil in the topic and it hit me that oil was just the same sort of magical substance that had all the right properties to be cold energy. No chemical source was better. As with cooling there is no magic bullet or cold ray if you will so with oil there is nothing better than oil. Obviously using this train of thought water has no substitute.

Then you realize these fundamental constraints break economic laws i.e you cannot treat intrinsic physical systems using classical economics as they simply don't obey as they have no substitute.

Heat,Cold, Water, Food, Clothing, Shelter and oil follow more basic laws. Oil because we made it fundamental in our society. Substitution fails for this class of fundamentals thus attempts to use traditional supply demand substitution logic to predict how declines in these will behave also fails. Its simply the wrong set of equations.
In particular if the availability of any of these results in a life or death decision then price does not matter. As the supply falls either through distribution problems or outright declines of any of these then their economics approach the life/death infinite price boundary. If a man dying of thirst had all the money in the world and you had a glass of water he would trade all his wealth for that glass of water rather than die. Assuming of course he wanted to live.

One can see that on the economic front things quickly get fairly irrational as wealth can't change the fundamentals.

depletion rates for haynseville wells are all over the map, just as decline rates are. many do not even have a full year of production and exhibit a depletion of half the eur. that is, 50% depletion of beginning reserves in less than 1 year, based on the assumption that eur can be judged by that short of a history.

I've slept since I talked to Kurt Cobb, but in any case what he said, quoting me, was the first year decline averages about 65%, which seems about right. He also said that most wells are totally depleted within four years, which I don't think is correct.

I believe that Arthur Berman's estimate is that the average life of a Barnett Shale well is about 7.5 years, but it is probably accurate to say that most of the gas (80% plus?) will have been produced by the end of the fourth year.

NASA - As WT explains you have to not put any weight to comments of SG well life. There are SG wells in Kentucky that are still producing commercially more then 30 years after they were first completed. But such a well might only be producing $10 worth of NG per day. As long as there is no water produced with the remaining NG it will contnue to flow with just a few psi of pressure. That NG then has to be run thru a compressor to get it into a sales line.

zap -- the frac water is a relatively small amount compared to the formation waters that might be present. After the frac there's the "unloading phase" where that injected fluid is recovered. Sometimes you get it all back...sometimes not. But once you've recovered as much of the frac fluid as you can the NG will be often be produced dry. But even if there's a little water in the production stream the pressure will push it up and out of the tubing. The problem with water production (even if might only be 1 or 2 bbls/day) is when the pressure drops too low to lift the water out. There are artificial lift systems used to unload such water and keep the well flowing. The real problem begins when the cash flow won't support such lift systems. But that's why many New Albany Shale Gas wells can produce so long: no water production ever. Flowing pressures can be as low as 10 psi. And even though they have to compress the NG to get it into the sales line they'll use part of the production stream to fuel the compressors. BTW: the New Albany Shale Gas play was one of the first NG plays of any kind to be developed in the U.S. They were using NASG for street lighting in Ky before 1900.

jokuhl -- I suppose it depends on what perspective you're viewing the system. If we're strictly looking at the nature of the fields the distinction between PO and PNG are clear. Two different animals that occur in overlapping but distinct environments. Regardless of how much NG is every discovered and produced it won't change the oil decline curve. On the other hand, if you're thinking in terms of Peak Energy your case is valid. Then, yes, oil and NG are in the same room.

We each focus on that which impacts our world the most. For me, being way upstream on the exploration side, PO and PNG exists in two different worlds. For you and similar folks you're looking at the end use world. Neither is wrong IMHO...just different focus.

EOR falls under the catchall of 'reserve growth'.
First there's original oil in place OOIP which is 6000 Gb according to USGS.
Of that there's recoverable oil of 3000 Gb.
We've already consumed 1000 Gb.
So theoretically there is 2000 Gb left, which is divided into 'proven' reserves of ~1200 Gb plus 'reserve growth' plus 'undiscovered'.
The trend of the rate of new discoveries has been declining, but about 10 Gb of new discoveries were found in 2008. In the grand scheme of things this amount is trivial.
The inclusion of heavy/superheavy oil and bitumen as new discoveries ignores their slow development.
Most of the production comes from reserve growth via either EOR and more drilling rigs.
Since 2000, 120000 new oil and gas wells have been drilled in the US.
Exxon in 2008, a year of record prices, saw their production drop by 10%.
The amount of tertiary EOR(CO2 and thermal) in the US is 10% at most today and much less overseas. The secondary EOR is declining as shown by the general declining productivity of oil fields worldwide.

So, actual production is dropping, new discoveries are small, tertiary EOR development is tiny, unconventional oil development puny(Canada added the most to world production) and number of global rigs(less than 4000 and US rigs at 2000) were actually fairly constant before 2009.

These innumerate PO deniers need to be totally debunked.
IMO, in every category of oil potential the short term situation is dreadful.

I didn't say "undiscovered reserves", I said proven reserves plus 'reserve growth' plus'undiscovered'.
Back in the 1950s the world had 600 Gb of proven reserves. Since then much oil has been discovered and reserve sizes have grown considerably, in part because of EOR methods.
Undiscovered oil is real but the volume of the annual discoveries is dwarfed by the world annual oil consumption. The growth of reserves has not kept up with demand either.

Just to add to maj's glorious rant, I'll point out the EOR isn't a new idea. Ca, La and Texas have been the major oil producing regions since the early 1900's. EOR has been going on in these fields since the 1940's. The U.S. is the third largest oil producer in the world. One factor is our continues recovery from EOR projects. By their nature these are very low decline rate projects. The only major improvement in EOR to occur in the last 20 years has been horizontal drilling technology. But very few of the existing oil fields would benefit from this technique. And even for those that can benefit this approach is a very expensive method to use for EOR compared to all other methodology. To take the recoveries we've made from our oil fields to date and then extrapolate future recoveries from some new and improved EOR techniques defies all known and accepted reservoir engineering tenants.

Production from EOR projects will continue the be a large portion of our production base. In fact, as new fields are developed and depleted I would expect EOR projects to represent an ever increasing percentage of our production base. But I've seen no technical analysis that can offer any expectation of future EOR projects doing much to limit the pain of PO. When folks say "if we can recover 30% more from new EOR projects" all I can think of is the old line: If frogs hand wings they wouldn't bump their butts. But they don't so they do. If new EOR projects can recover as much oil as we've already produced then we're not anywhere near PO. But they won't and we are IMHO.

Rock, I have been seeing reports that North Dakota oil production has been growing substantially lately. I assume this is because the horizontal technology has reached a point where we can atually recover some of the Bakken formation oil, that didn't make sense (or that we would have to suck through a very thing straw). So I think the question does arise, as to what is the likely trajectory of the oil production from Bakken and other formerly marginal plays. I would love to see a post on this.

Well I'd argue it has a lot to do with fast decline rates or rather the decline rate.

I'll do my best to get my paper posted on a blog this weekend so I can start referencing it but I do have data that suggests that the decline rates kill us in the end.

Horizontal drilling seems to have acted like a very short term adrenaline boost at the expense of some impressive decline rates. Not so much as in the overall rate of decline but in the fact its a flat linear decline post peak. I expect the Bakken play and UNG will show the same sort of decline. A peak then a linear decline at some slope.

Next although I'm still waiting on more data it seems that we have a sort of stepped linear decline which is interesting. By this I mean you see a linear drop at some slope then a new linear drop at a even steeper slope.
I'd guess this has a lot to do with exhaustion on new plays i.e lack of discoveries resulting in a ever steeper decline rate.

Why it seems abrupt is hard to say but thats also influenced by the propagation of the technology. Once horizontal drilling became common then the boost from horizontal rework of existing fields dropped off rapidly. It just ends.

And example is the new multi-frac shale NG plays gives a boost but once widely deployed it no longer has a impact and the full brunt of the increase in extraction rate is felt.

Next this has very very little to do with decline rates based on 50% of URR so recent production high and declines are probably not based on anything to do with the underlying resource level left. Give technology has advanced it makes sense to assume we probably managed to continue to increase production past 50% URR and have been living on our silver bullets for a while.

Now whats interesting is I was a bit wrong on how things play out because technology advances do continue to work on the back side of the curve they don't just cause collapse. You do get a linear decline rate at a fairly gentle slope at least for quite a while. I was certainly also wrong in how it plays out.

However I think this slope has a lot to do with he period where the use of the technology is expanding so even as your depleting faster your adding more wells that are extracting faster. For whatever reason this balances to a linear decline of a fairly gentle slope. Probably because the rate new wells are created is economically driven by the decline rate of the existing wells. Your shooting for a constant to increasing production rate and get a linear decline.

However like I said I'm seeing signs that you do get a second and fairly sharp change once the rate of new wells slow.

Thus overall since these are high tech super straw wells the rate of production is dependent on the rate of addition of new wells. At first you get rising production then it flattens then a fairly shallow decline then a steep decline so two linear decline phases.
The only place its related to URR is in the expansion of the new well phase i.e where your hitting new prospects and bringing new production online. Once the province is mature then it seems technology has allowed us to keep extraction rates high until the rate of new well creation fell.

In any case not what I expected as I said I really missed the boat on the fact that advanced extraction methods do continue to allow high production rates even during the decline phase as long as you can drill new wells. Sorta of a duh moment if you will. The problem is I think I was only half wrong because as I said its a two phase decline pattern a fairly gentle linear decline then I'm finally right and off the cliff you go.
In a real sense this is even worse as at first the technologists and anti-peak types see a fairly gentle decline that can be overcome by just trying harder even if it persists for years its still shallow enough that it looks like it can be "beaten". But its not the real decline which sets in later as new well creation slows dramatically for lack of prospects.

What I find really interesting is we peaked about ten years ago and have been facing a decline rate of around 1mbd or so per year linearly since we peaked. This puts us down off peak by about 10mbd right now. The new Iraqi claims match perfectly with what we would need to get back even. Add in other claims and we would be back to higher production. I don't know if anyone really believes this but I suspect I'm not the only one who knows real oil production is already down by about 10mbd. The good match with new Iraqi claims suggests that at least publicly the people in the know are being assured that this is not the big one.

If it was true and you added in other claims then the "real" peak would be out in the 2020-2030 time frame esp if you considered when we would even fall back to the level we are right now. More than enough time for substitutes to be deployed. So the sort of realistic official story if its believable actually fits assuming a Iraqi miracle. Now I think thats all smoke and mirrors and everyone esp the Chinese know it. But for now it buys them and us time to play strategic games before the going gets rough. I'm guessing Europe is simply assuming they will cozy up to the Russians and ride it out. Obviously this leaves India, Japan, Korea, South America etc etc sitting in the cold. For the moment however extend and pretend is in everyones best interest until its not. My best guess is perhaps a year before its clear Iraq ain't gonna happen then things get really interesting on the oil front.

EOS -- I don't have access to the data base for that play so couldn't really offer a valid profile of activities there. Perhaps RockyMntGuy can chime in. It's safe to assume activity will rise and fall with prices. And the technology is fairly well developed. And like all such plays there will be sweet spots and dead areas. I don't have a sense where the play is in that respect. The operators may have already figured that out. If not the future will likely be full of surprises...both good and bad.

The Bakken Shale play is all about using the latest and greatest technology to identify the sweet spots in the Bakken Shale and run horizontal wells through them. It's a pretty big formation, but the costs are high and the recovery rates are low. The sweet spots are few and far between. But if you can find them and oil prices stay high, it's a pretty good business.

For North Dakota, at current oil prices, it's a pretty big deal. It's caused a huge increase in state oil production. For the US as a whole, not so much. It will never produce like the big East Texas, West Texas, and Alaska North Slope fields. Don't buy a new SUV assuming the Bakken will keep it in fuel.

The USGS came out with some pretty wild projections of ultimate recovery from the Bakken, and I think we can give it the same credibility as a lot of their other projections. If pigs could fly we could get that amount of oil out of the Bakken. Equal probability.

"We feel that the whole issue that came to the surface and created a lot of concern about peak oil is behind us," the chairman and chief executive of the world's leading oil producing company told a World Economic Forum session on the global energy outlook.

Why was it an issue in the first place, snookums? Pure alarmism? Why didn't you flood the market and make it better?

Ever track annual total percentage movements in KSA output, WT? Bet that would be revealing, showing up ossification, or complacency.

World Production/Average Price yields a manifestly descending trend. Curiously it peaked in 1998, at least with numbers back to 1986, which is all EIA had for me quick and dirty. Must explore that in greater detail too.

From 2002 to 2005, for every dollar increase in oil prices, global three year cumulative crude oil production increased by 167 mb/dollar (cumulative production increase of 5,164 mb, versus 2002 rate, with price increase of $31).

From 2005 to 2008, for every dollar increase in oil prices, global three year cumulative crude oil production fell by 15 mb/dollar (cumulative production decline of 632 mb, versus 2005 rate, with price increase of $43).

I wish these folks lots of luck. I recall the Oregon Energy Office publication, "Transition", in which they discussed a change in energy supply to renewables. That was back in 1975. There was also the book "Rays of Hope: The Transition to a Post-Petroleum World" by Denis Hayes, dated 1977. Remember him? Hayes went on to head of the Solar Energy Research Institute under Carter...

No, I'm talking about 'big actions' like growing out local permaculture and distributed renewable energy sources and such simply as the kind of Big Movements akin to a powerful stroke of both arms that might just get the nostrils and mouth clear of the waves.

With overshoot and our accustomed petroleum dependency, and the resulting flabbiness of our people, I feel that right now, we're maybe 2-3 inches under water, but the straws in our noses (ie Petroleum Hoses) that allow some air to still be trickling in let most of the nearly boiling frogs see our situation as 'essentially stable'.. And YET, learning to tread water a bit, and then remembering some of the other more advanced points of swimming might get a few more of us 'back to the land'.. which as I was saying to Ron yesterday, seems like a worthy exercise!

Sound ok?

(In the above analogy, it would probably be fair to say that the 'Deeper Water' that we have to breathe through these little Oil Straws might be a decent visual for describing EROEI.. while it also wouldn't hurt to suggest to people that the deeper undersea that we are drilling for oil, in no small way is leaving OURSELVES that deep under the sea as well.)

Admittedly, my perspective does have some 'natural variability' to it.. just like the incredibly diverse array of people, skills, cultures and geographies that they live within. All of these things will probably have vastly different effects on the way they cope, and the odds that they will make it through.

I am terrified, and I am optimistic. We have some terrible dangers around us.. and we are smart and have some tools, approaches and libraries that can prove very helpful.

I get really pissed off when we talk about any of these hopeful tools, projects and plans that can help, and people come in all snyde and suggest we're just trying to prove 'BAU is possible', or that 'Happy Driving will continue', etc...

I know we're in trouble, I do. But that response is getting to sound very Middle-school.. This tone of self-satisfied nihilism that plays itself off as 'Realism'. Noone has a crystal ball. Noone. So overassured Doom OR Cornucopia is vanity, in my opinion..

The details of what comes after are interesting and I would wager that we already have the tools, mentally and physically, to more than adequately deal with that.

The number one issue, the game changer that can pull the rug out from under all the carefully thought out plans, is getting from here to there.

If we allow those who got us into this mess, those who are making things worse now, those same people who indeed invented the game of "SHOCK DOCTRINE", to manage the "transition", I think it's safe to assume there will be bloody wars.

Humanity will find it very difficult for #1- the well off and their offspring realizing that they will be less so from now on. #2- the poor realizing that their chances to improve their lot and that of their offspring, the only thing keeping several billion people going, has gone to ZERO. Did I miss anyone?

I prefer the term Bottleneck to Transition but even that term doesn't adequately describe the potential for...shall we say...Drama!

It would be great if we had some group, some think tank that would focus on the bottleneck and not get stuck hashing out all of the minutia of what the world should look like AFTER this period. Otherwise there just might not be an after.

...a common thread held them together. Not a person in the room needed to be convinced that the world is entering upon a great paradigm shift that will sweep away much of industrial civilization, thoughts of economic growth, and the lifestyles that have grown up in the age of ubiquitous fossil fuels.

The meeting's organizer, a seven-year old think-tank called the Post Carbon Institute, has no problem with this, for they know that leaders everywhere will soon enough grasp the message they don't want to hear. Oil will run short, the financial system will collapse, or the atmosphere will do such terrible things to us, that every last person on earth will understand - our lifestyles are not sustainable and we will soon transition to some other manner of life or die off like so many species before us.

"leaders everywhere will soon enough grasp the message". I beg to differ. I challenge anyone to show concrete evidence that this day of reckoning is upon us. I maintain that the day people en-masse internalize the concept of Peak Oil or Peak Everything is the very day that American consumers (not merely the poor refugees in Port-au-Prince) show up to their local grocery supermarket and find the shelves bare. We're a long way from that day so in the meantime let's call off the search parties and go back to bed.

The leadership required to effectively manage decline must come with a totally different mentality and skill set than does that which has typified BAU leadership. I don't expect that the BAU leadership will change their minds, I expect that the BAU leadership will be changed - replaced by a different set of leaders with appropriate mindsets and skill sets. I don't know how or when this will happen, I just know that it will because it must. I'll know that we've really changed from a BAU mode to a managed decline mode when we've seen that degree of leadership change. Until then, denial, cluelessness, and counterproductive effort will be the order of the day.

WNC - I agree but in my less than humble opinion I assert that the forces to effect a paradigm shift will be akin to the final assault on Saigon almost 35 years ago. The Final Assault was over in less than a day when the Communist armies of North Vietnam captured the city of Saigon, ending the Vietnam War.

Soon after, soldiers climbed on top of the palace to plant a red and blue flag with the yellow star of the Revolutionary Forces of North Vietnam.

But then nothing happened for several hours.

The conquering soldiers were left walking up and down the palace's corridors and stairs, or resting by their tanks in the front yard.

Inside the palace, all the cabinet members of the South Vietnamese government, with General Duong Van Minh as its president, were sitting around a big table, nervously drinking tea.

The attack had been too swift and Tank Units 843 and 390 reached the centre of Saigon before anyone in the communist army had the time to prepare a proper ceremony for the handover of power.

When the final collapse of industrial societies occurs I believe that it will be swift and violent. Who will take control of the remnants of society is anybody's guess. I suppose there will be "re-education camps" hastily organized in order to endocrinate or eliminate those unable or unwilling to adapt to the "new paradigm". Hopefully you and I will be long gone by that time.

The leaders of the world crave industrial production. Some aboriginal peoples cling to their low-carbon lifestyles ... no, even Eskimos need fuel for their snow mobiles and would like more spacious living quarters than an igloo.

Was a time 35 million years ago when the Appalachain Mtns. were covered with tropical type forests and the sea levels were higher ... then a comet or asteroid struck the south end of the Chesapeake Bay and triggered an ice age.

So the sea-ice is not only declining, it's starting to melt earlier in the year and the melt season is longer. Following the links from the article, I found THIS GRAPHIC LOOP, which gives a very clear picture of what's happening. Warning, a high speed link may be necessary to view...

Viewed from a US perspective, it's been a rather cold winter so far. However, the Arctic has been rather warm and the sea-ice freeze has not happened as fast as that of the long term average, but is running more like that of the 2006-2007 freeze, which preceded the remarkable 2007 minimum at the end of following summer melt season.

I was curious as to whether the 2006-2007 curve was indeed for that time period because of the date change on 1 January. Here's another graph in which the data for 2007-2008 is also shown. This graphic does not include the latest data, but does resolve any question regarding whether the curve for 2006-2007 is in fact the one shown on your referenced graph.

Another point to be made about possible ice melt --> the UAH temperature record for January, check out ch05 and select record highs (for baseline ~1980-1999) and 2007. Notice that January 2007 temps were "out of the stratosphere" for the low-mid troposphere, now notice that January 2009 temps are "out of the mesosphere"! The UAH dataset for the last six months has to be the hottest six months in its short history.

I think it has to do with prevailing winds and currents. If you are talking anomalies (i.e. differences from long term baselines you might expect that over time the two sides evolve similarly). But there could well be a bias (i.e. at the same lattitude one side is nomrally colder or thicker ice). I think the thick multiyear ice hangs around the Candian arcipelago (all those islands North of canada near Hudsons bay).

Lots more talk about the economy of course. The one thing that really caught my attention was the comment about boosting exports. Yeah, that needs to happen, but how? Cutting a few more trade deals? That might help, but we'll have to do more. The one thing that would really help - imposing a VAT so that US manufacturers were placed on a level playing field with their foreign competitors - was not mentioned.

Other thoughts?

edit: Interesting approach wrt climate change: "Even if you don't agree, clean renewable energy is the right thing to do for the future."

Increase exports? That's easy. All that's needed is to let the dollar fall out of favor as the world's reserve currency. Here's Sarkozy's latest comments on solving the banking problem. Of course, as the dollar falls, the cost of imports will increase and that would include oil...

Yes, Obama did say 'clean coal'. If you think it doesn't drive most Democrats crazy you'd be wrong.
In this case, Obama understands the issue better than his supporters.
(what does he understand that you don't?)

But, don't you understand? Clean coal comes from the environmentally friendly methods of production, resulting in gentle hills in place of those ugly mountains and valleys. This is the new world of Corporamerica...

Politics! I big part of politics is playing to the publics misunderstanding of the way the world works. Trying to educate the public away from their myths is a losing strategy (politically). So he has given into popular but wrong notions, both economically, and energy wise. The alternative is to give up the country lock stock and barrel to the repubilcans who have madeplaying to popular myths a cornerstone for so long they could never govern well.

But of course his pandering to the blue dogs has demoralized the liberal base, and the technocratic base. It will probably backfire.

Todd - I am going to take you at your word when you say that, so I would assume that you have no plans on receiving social security or medicare, you raise all of your own food, you don't drive on public roads or allow your children to attend public schools or universities.

Then I assume that you believe that BAU will just go on and one because the "government" is going to save you.

But, let's talk about Social Security since I get it. Over the years the government you appear to believe in has jiggered the CPI numbers to reduce SS COLA's. I don't remember the last numbers I read but benefits were about 30% lower than they would have been had the government continued to use its only methods. The government cheated. Are you going to trust a government that cheats?

Further, regarding the benefits that accrue to me: Had I not paid taxes for 59 years (I started paying taxes when I was 12), and continue to pay, you'd be right. But I do. Therefore, you are completely out of line with your post.

Wow Todd, being you have no faith in your government. I would like to make you an offer. I will pay you 50% of the amount of your Feburary 1 2010 SS benefits today, if you hand over 100% of your Feburary 1 2010 SS benefits to me that the government actually pays you. If you really have no faith, a bird in the hand is worth two in the bush.

Yes, out of line. WAY out of line. One, he's an American and thus has the right to think whatever the hell he wants. Two, you have the right to say what you want, but you have no place in misrepresenting what he said and ignoring the context. Three, the context clearly does not mean he believes the daily functions of the government are to be highly doubted day in and day out, but that what happens at policy levels day and day out is full of lies. And he's absolutely right.

Try looking at Shadow Government Stats to get a sense of the way the government really does lie on a daily basis. You might also read some of the articles detailing how unemployment stats are played with.

You could also consider Iran/Contra, Iran in 53(?), the second Iraq war, Tonkin Gulf and the USS Liberty incident.

Captain: I had a girl do that to me in Kansas city- Didn't make her my wife..

Silverado- Lawrence Kasdan

Joe,
Just because basic services and elections are and ought to be functioning today doesn't mean our political system is actually 'functional' at this point.

'Oh, they built the ship Titanic to sail the ocean blue,
and they thought they had a ship, that the Sea would not go through;
But the Lord's almighty hand, said the ship would never stand
We were sad when the great ship went down...'

joecool - The people who do the actual work of the government: teachers, parole officers, policemen, air-traffic controllers, Marines, Sailors, Soldiers, trash collectors, street sweepers etc. do their job regardless of who happens of who happens to be in office or how dysfunctional the political system might be.

My point is there is a lot of redundancy built into the system. It will take a lot more than a single iceberg (e.g. 9/11) to bring this system down. Yeah a huge meteor the side of Manhattan could do it but that would be a lottery event. Possible but unlikely. Therefore the question should be how long will it take for human societies to fail?

But it would also be reasonable to recognize that when Todd says he has NO Trust in Government, that he is extremely peeved at our current situation, and is really not aiming this kind of statement at the Postman or the Cops.

Yes, he said it in an extreme way, but it's worth offering a little benefit of the doubt as to just how polar the attitude really is.

Over the years the government you appear to believe in has jiggered the CPI numbers to reduce SS COLA's.

Todd's whining about the govt. playing with the CPI numbers to cheat him out of his just deserts after "59 years" of paying taxes is completely selfish. My dad is in his eighties and has been collecting SS and medicare for 20 years. He's already collected far more than he ever put in but he still whines about welfare mothers, food-stamp programs and government giveaways. My Dad's wealthy and doesn't need the benefits but if there was any talk about "needs testing" he would be camping out at his congressman's door. The problem with democracy is it's always the squeaky wheel that gets the grease.

The actual CPI for 2009 was 4.4%! The City of Flint, MI used the CPI figure in computing their property tax increase for the year.
2008 was 2.7%.

So much for the SS figures!

It's all a scam. The Dems are in bed with the corporations just like the Reps. What we hear today is all smoke screen so they can hide the truth.

For instance, attack the big banks? Not hardly. They'll gladly pay a 2 percent tax on excess profits, so long as the system is fixed in their favor. Banks can borrow money from the Fed at 0.5% interest. Then they can loan it to - guess who? Right! the USofA, at 3.65% interest. That is a spread of 3.15% on however much they can "borrow". Or how fast they can pull it out and turn it over?

As long as they are allowed to do that, why should they care about putting distressed real estate on the market through foreclosure. That has to be the deal they made.

Obama: "Please, Mr. Banker man, pretty plese don't destroy the real estate market. Don't foreclose all those nice Americans' homes."
Bank: {through it's spokesman, using his free speech from above} "Tell ya what I'm gonna do, Mr. President. I'm gonna make you an offer you cannot refuse. You deal me as much money as I want at 0.5 percent, and I will loan it to you at 3.65 or so percent. You do that, and we won't foreclose."

I've more trust in Government than private corporations. I'll trust treasury bills more than corporate bonds, for eg.

But we have made a religion of "government sucks, and can't do anything right". It is a self fulfilling religion, the more we expect it to screwup, the more we set up the conditions that cause it to fail. I guess you could say we get the government we deserve. When our country was formed, the founders were afraid of government, and they set up a system that makes it very hard for government to be effective. Lately we've added the Senate supermajority thing, and an opposition that automatically votes against anything from the other party, -as they figure if they make the current majority party fail the voters will turn to them. Al the while the public gets even more turned off about government. This looks to me to be a death spiral. Only government can solve many of the looming problems (like energy, healthcare etc.), but we have built a dysfunctional system -and a confused public so that that solution is unthinkable.

[9] "I am grateful to the House for passing ... But even if you doubt the evidence, providing incentives for energy efficiency and clean energy are the right thing to do for our future - because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation."

[8] "But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. That means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean coal technologies. And yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America."

[7] "Next, we need to encourage American innovation. Last year, we made the largest investment in basic research funding in history - an investment that could lead to the world's cheapest solar cells or treatment that kills cancer cells but leaves healthy ones untouched. And no area is more ripe for such innovation than energy. You can see the results of last year's investment in clean energy - in the North Carolina company that will create 1200 jobs nationwide helping to make advanced batteries; or in the California business that will put 1,000 people to work making solar panels."

[6] "You see, Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China's not waiting to revamp its economy. Germany's not waiting. India's not waiting. These nations aren't standing still. These nations aren't playing for second place. They're putting more emphasis on math and science. They're rebuilding their infrastructure. They are making serious investments in clean energy because they want those jobs. "

[5] "Tomorrow, I'll visit Tampa, Florida, ... We should put more Americans to work building clean energy facilities, and give rebates to Americans who make their homes more energy efficient, which supports clean energy jobs. And to encourage these and other businesses to stay within our borders, it's time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America. "

[4] "Next, we can put Americans to work today building the infrastructure of tomorrow. From the first railroads to the interstate highway system, our nation has always been built to compete. There's no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products. "

[3] "Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. 200,000 work in construction and clean energy. 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, and first responders. And we are on track to add another one and a half million jobs to this total by the end of the year."

[2] "We will continue to go through the budget line by line to eliminate programs that we can't afford and don't work. We've already identified $20 billion in savings for next year. To help working families, we will extend our middle-class tax cuts. But at a time of record deficits, we will not continue tax cuts for oil companies, investment fund managers, and those making over $250,000 a year. We just can't afford it."

I'm not sure about that Dinh. Checking his worda again he didn't say he was for or against expanded drilling in gov't lands. He said we "had hard decisions ahead of us" or something close to it. That could be wide open drilling or shutting it down completely. Depends on what "hard choice" he makes. It was great political line: every one was free to interprete it's meeting from one extreme to the other. A line that said something to everyone but in fact said absolutely nothing of substance IMHO.

And there is the hubris that Man can be responsible with fission power.

I fail to see how fission power is faundamentally different than any other form of energy that can scale to meet America's energy needs. I could say the same thing about coal. Coal mining --especially mountaintop removal-- permanently destroys ecosystems. And burning it releases millions of tons of highly toxic pollutants (incl. mercury) and greenhouse gases. Whatever we choose to do at this point comes with potential downsides. But what's the alternative? Giving up?

Every square foot of rooftop that gets sun is energy income that you throw away every day. Grabbing that is not giving up. And it doesn't leave you with recurring stories like this.. (from above, today)

Other factors cloud the plant’s future. A vice president of Entergy, the company that owns the plant, had told state officials he did not believe the plant had underground piping that carried radioactive material, although it does.

And Entergy is seeking permission to spin off Vermont Yankee and five of its other reactors into a new subsidiary, a move that the plant’s opponents view as an attempt to limit Entergy’s legal liability.

Yes, coal rips up the earth and puts ungodly amounts of crap into the air and water, while Fission leaves highly concentrated little packages of radioactive toxics, often directly connected to waterways. There is intense business and hence political interference in studying and revealing all the degradations that are regularly trying to seep out of this purportedly 'clean' source.

No, there are fundamental differences, and there are also subtle, but relevant differences as well. Trying to sweep them all into a big 'It's all just energy' box is simply willful ignorance.

Not really. It is part of the cap & trade bill. Reid has a bill on Thorium.

I fully support nukes that
- Replace coal power plants
- Either reprocess "nuclear waste" or use Thorium in LFTR

I'm afriad though, industry will just push for Gen 3 light water plants to make money.

-"Yes" to more offshore drilling - another surprise?

Again no. With high oil prices - not allowing for drilling is again politically suicidal. The best way to handle that is to let local communities decide - and I'm sure most will reject drilling because of "not in my backyard".

This weeks natural gas draw was only -86 billion cubic feet, well below what what was expected. It was expected to be -110 to -115. The five year average for this week is -166. Natural gas is down a dime, so far, to $5.13 on the news.

To add some context, the 5 year average weekly withdrawl for the 20 week season is 100bcf and the average weekly withdrawl this season thru 11 weeks is 115bcf. With 9 weeks to go, it appears that we will exit the withdrawl season with stocks at their upper bounds of +/- 1700bcf. Assuming imports remain constant, if production doesn't begin to decline, then we will be entering the fill season in oversupply mode. IMO, A 1bcf/d drop would put supply within 5 year average limits and a 2bcf/d drop would put it in undersupply mode

"The report concluded that a growth rate of just 3%, the "carbon intensity" of the global economy would need to fall by 95% by 2050 from 2002 levels. This would require an average annual reduction of 6.5%." "For each year the target was missed, the necessary improvements would grow higher still," they observed."

"It is precisely this economic growth which will lift the poor out of poverty and improve the environmental standards that really matter to people - like clean air and water - in the process, as it has done throughout human history," he told BBC News.

"There's only one good thing I can say for the NEF's report, and that's that it is honest. Its authors admit that they want us to be poorer and to lead more restricted lives for the sake of their faddish beliefs."

The long-term goal for this corridor is top speeds of up to 110mph, reducing trip time by one-third from Washington, D.C. to Richmond, and to four and one-half hours between Richmond and Charlotte. Eventually, the Southeast Corridor is expected to use Atlanta as a regional hub, with connections from Atlanta east to Charlotte, south to Macon and Jacksonville, north to Chattanooga, and west to Birmingham.

WNC, I just went to the event here in Durham announcing the North Carolina - Virginia portion of the funding. Now might be a good time for folks to think about joining the National Association of Rail Passengers (www.narprail.org) so that our congresspeople know how important this is if we want to be doing any traveling a decade or two hence.

When are we going to get some train service up to the mountains? Not any time soon, I'm afraid, so I'll still be in a car on my visits up that way (unless we're fortunate enough to have some decent Mexican bus lines move up this way and give Greyhound a run for their money).

Extending the line to Asheville is on the drawing board, but has been put on the back burner due to lack of funds for years, now. I was hoping that a little bit of the money from this latest initiative might come our way, but no such luck.

I figure that once gas becomes so scarce/expensive that no one can afford to drive up to the mountains any more, THEN they will take it off the back burner and start working on it. Which means we'll get some minimal passenger rail connectivity only 7-10 years after we desperately need it.

This is NOT high speed rail. It is better than what we have, but high speed is INO 350 mph, average, city center to city center. And it can be done with existing technology and the political and economic will to proceed. This would replace air travel, save time, save money, and the construction of it would be the "interstate" project of the 21st Century. Building the infrastructure and continuing with the rolling stock would put two generations of Americans to work! The payoff would be huge for the country, both in energy savings, environmental improvements and simple national pride.

Of course, it would displace some existing corporations, so... you can count on them using their god given freedom of speech under the 1st Amendment and contributing millions to elect people who won't even think of it. They might even fund research to prove it cannot or should not be done.

Dang... now I've lost the buzz I got up above in the Gift Economies! Back to reality!

First, AVERAGE speeds of 350 MPH, city center to city center are impossible with current technology.

Second, even in nations with HSR (say 200-225 mph top mph), people do NOT go long distances by train. They fly from Osaka to Hokkaido, from London to Frankfurt, Berlin to Rome. Modal share by train drops <10% for distances >500 miles/800 km.

Third, inter-city train service needs Urban Rail to connect into. DC to Boston works because NYC has good Urban Rail, DC is decent, Boston & Philly OK Urban Rail and Baltimore has two lines.

LA to San Francisco HSR will disappoint because SF has decent Urban Rail and LA has minimal and nothing in between (not sure if I should count San Jose).

Fourth, I am against speeds much higher than 125 mph in the USA. This makes the dual use of tracks for medium density freight (such as fruits & veggies) and passengers impossible (for practical purposes). 110 mph passenger service and express freight service of 95 mph can co-exist and give a good economic return on the investment. In an oil shortfall, getting food delivered is the highest priority IMO.

Building true HSR (say top speed 200 mph) is a waste of resources at this time for the USA. I liken it to someone on foodstamps loading up on lobster and porterhouse steaks on the first day of the month when they should be loading up on red beans & rice, cabbage, frozen veggies, peanut butter and a few apples and bananas.

We lack the basics, the essentials in this country. Electrify, expand and slightly speed up the freight RRs and build massive amounts of Urban rail first. I am more excited by a rail over rail bridge at a bottleneck than I am by a demo HSR line.

Alan: I disagree about current technology. It would certainly be costly, but given similar subsidizes as air travel, it could be done. What Obama has proposed is just for show. Like what I have seen from him in all arenas to date. Wish he could be a leader... doesn't seem to be happening.

And I totally agree that urban rail is a first priority. Great cities have great mass transit... SF, NY, Chicago (not great, but okay, I guess), London, Paris - Europe in general.

Nor to I necessarily believe that 350 mph is needed... what does that say about air travel?

OTOH, we need infrastructure investment in distributed power, and systainable systems in place before anything else.

Not that I believe I will ever see it, or anyone else for that matter. We have demonstrated an abject lack sufficient willpower, leadership, and of course capital. We have been too busy trying to get rich now, and not carrying about later. Most of us failed on the first point... we will see about later as it becomes the now.

There are high speed (200 mph) trains all the way (slow down in the Chunnel) between the two financial centers of London and Frankfurt. Good Urban Rail in both cities. Yet not a single one seat/multi-stop train between the two. A transfer between trains is required in Brussels.

Reason, Euros will not travel that far by train. They fly instead.

Aviation subsidies from outside the industry today are minimal. $12/day parking and $5 hamburgers do subsidize the rest. Air traffic control now comes from the Aviation Trust Fund (ticket taxes, etc.). Every time you land, you get charged an Airport facility Charge (non-stop flights often end up being cheaper because of this). Etc.

Lets worry about top speed 200 mph trains in the USA in 20 or 30 years, after we have built the basics (electrify, Urban Rail, improved grade separation including rail over rail bridges, etc.). Red beans and rice first.

If the USA were rolling in dough, and had virtually unlimited resources, then building out a complete network of HSR would be super.

Unfortunately, our financial situation is anything but.

A big problem is that the US is not Japan, or even France. We are a very large country with vast distances between major population areas, and we don't have a very high population density overall. Thus, it is little accident that when oil was abundant and cheap and aviation technology had developed far enough, passenger air service would develop in the US and become the dominant form of inter-city travel.

Another big problem is that the US doesn't have just one city that is the political and economic hub, from which transport lines can radiate out in spokes; We have NY plus Washington plus Chicago plus LA plus Atlanta plus a dozen or more other regional hubs. That means that a much more extensive network is required, and the political reality is that most of it must go up all at once or there will not be adequate political support for any of it.

It is even difficult to just get a single passenger rail line of any speed built between any two cities, no matter how much demand there is for it and how much economic sense it might have, because such lines usually cross state lines and thus require considerable federal involvement; the interests of any two states will probably be ignored or blocked unless there is something substantial in it for the other 48. This is the reason why you can take the train from Charlotte to Raleigh and back on the same day, but why you cannot take the train from Charlotte to Greenville or Atlanta and back on the same day: Charlotte-Raleigh is entirely within NC, and NC-DOT can put up enough money to make it happen on its own.

It's funny reading comments on this site sometimes. I see there are many who are cock-sure that the peak of oil production has passed. I'm no expert but I would say that at the 2008 peak at just under 75mpd is likely not to be the highest daily crude production we see. The latest news from Iraq suggests that it might be possible that this figure is likely to be surpassed by a significant margin. Until that is proven or otherwise, the posters who religiously trot out the "actually, we peaked in 2008" line, sound like unquestioning parrots frankly.
The Climate change lobby have been taken to the cleaners recently for unsubstantiated claims based on feeble evidence, political interference and one or two scientists who may or may not be mentally deranged. That is not to say that climate change does not exist. Peak oil may also exist but the evidence I have seen through extensive reading and viewing cannot possibly say for sure that it has happened or even that it will happen in the near future. It is of course possible that it will, but Peakists need to be very careful that they do not end up looking like much of the Climate Change Lobby who have become the laughing stock of the scientific community of late.
If Iraq does indeed increase production by anything nearing 10mpd it will be extremely difficult not re-evaluate many of the peak oil claims of the last 10 years IMO. It'll be fascinating going forward, but I am coming to the conclusion that the collapse scenario that some envisage, or indeed the gradual decline just is not going to happen any time soon. However, I am prepared should I be wrong. Some here do not seem to consider that they too might be wrong.

Here are the average total global crude oil production numbers per day by year, versus average annual US spot crude oil prices:

2002: 67.16 mbpd & $26

2003: 69.43 mbpd & $31

2004: 72.48 mbpd & $42

2005: 73.72 mbpd & $57

2006: 73.46 mbpd & $66

2007: 73.00 mbpd & $72

2008: 73.71 mbpd & $100

Relative to the 2002 production level of 67.16 mbpd, in the following three period, 2003-2005 inclusive, the cumulative three year increase in production was 5,164 mb, versus a three year increase in oil prices of $31. So, for every dollar increase in oil prices, three year cumulative global crude oil production increased at 167 mb per dollar, again relative to the 2002 rate.

But then we have the 2006-2008 data.

Relative to the 2005 production rate of 73.72 mbpd, in the following three year period, 2006-2008 inclusive, the cumulative three year decline in production was 632 mb, versus a three increase in oil prices of $43. So, for every dollar increase in oil prices, three year cumulative global crude oil production fell at 15 mb per dollar, again relative to the 2005 rate.

Potential Production in Iraq

Iraq certainly has lots of potential, and there are lots of stories about their announced plans to achieve almost a five fold increase in production in 10 years or less. While I think that they can increase their production, I am in the skeptical camp (regarding a multi-fold increase in production) for several reasons.

First, I can’t find any case history of a mature producing region showing this kind of production increase. They closest analogue I can think of is post-Soviet Russia, where they achieved about a 65% increase in production over their post-Soviet low, to a rate below their 1980’s peak production rate. Note that Iraq would have to increase their production by about 50%, just to match their 1979 production rate.

Second, oil consumption in Iraq has been steadily increasing since 2003, and for Iraq just to maintain their 2009 net export rate (which preliminary EIA data show to be down slightly from 2008), they would have to increase their production at about 2.2%year.

So, the bottom line for me is that the most realistic positive outlook for Iraq, given the rapid increase in consumption plus numerous political and logistical challenges, is probably a slow rate of increase in net oil exports, and many factors could result in flat to declining net oil exports.

In any case, Shell and other companies are talking excitedly about what they can do in Iraq with improved technology. Here is a case history of what Shell was able to do in Oman, from 2004:

If Iraq does indeed increase production by anything nearing 10mpd it will be extremely difficult not re-evaluate many of the peak oil claims of the last 10 years IMO.

J-UK, you have to do some more reading and viewing. Only 9 countries/regions are pre-peak oilproduction. Without new projects coming on stream, oilproduction goes down 3-4mbd/year. So 10 mbd from Iraq compensates only for about 3 years loss. 'Good' to know is also that more than 90% of oilproduction comes from 1300-1400 fields and many of them are past peak. That is why in the IEA/EIA projection until 2030 a lot of the oil comes from future discoveries of giant oilfields.

Oh, I'm quite willing to entertain the possibility. I'm only a declinist, not a doomer, so I'm not committed to the notion that civilization will be plunging off the cliff anytime real soon.

However. . .

Your scenario assumes that enough money will be forthcoming to actually get all that Iraqi oil flowing, and quickly. Given the global economy, I woudn't be nearly so optimistic about that. There certainly will be some megaprojects there. I rather suspect, though, that things will be happening quite a bit more slowly in reality than they might in theory.

Your scenario also assumes that there is nobody in Iraq that is going to place some IEDs at some well-selected locations on some pipelines. Given the recent history of that country, I am not at all confident in such an assumption. More likely, it will be a continual struggle to fight off the terrorists/freedom fighters (depending on point of view) and keep the infrastructure running, and not a completely successful struggle at that.

Finally, your scenario assumes that if more Iraqi oil comes to market, that this will make no difference in what other major exporters do. Given that the Saudis have made it pretty clear that they would just as soon leave more rather than less oil in the ground for future generations, and they would rather not see oil prices fall too low, can you really be sure that the Saudis will not cut back as the Iraqis ramp up?

Others here may differ, but from my perspective "peak oil" is not a completely geological phenomenon, there are above ground factors in play as well.

It is of course possible that it will, but Peakists need to be very careful that they do not end up looking like much of the Climate Change Lobby who have become the laughing stock of the scientific community of late.

Would you be so kind as to back your up claim that Climate scientists are currently the laughing stock of the scientific community.

Also when you refer to the scientific community who exactly do you mean?

It is not common for example for biologists, chemists, and geologists to question the research of physicists.

Yet some self righteous and ignorant lay people are sure they know more about climate science than the actual climate scientists with doctorates and lifelong careers dedicated to the subject.

Oh, never mind, you heard on Faux news that the hacked emails proved there was a global conspiracy, that settles it then. Move along now nothing to see here.

Thank you for the responses guys, all very welcome. Off to the airport now so can't really write much now. Would just say though that I stick with my point that nobody knows for sure. The climate lobby does look stupid in the light of hacked -e-mails, and even the latest trashing of the glacial melt predictions which, in the last week, have been shown to be total rubbish. When I speak of the scientific community I would suggest that there have been any number critical of the way in which flimsy have evidence has been used to back up some very good arguments. When that is exposed, then the good arguments come under question. That was my point.

Of course, this was not due to certain vested interests making a big show and dance over nothing. The only thing that looks stupid is the way right-wing bloggers, lazy reporters, and the anti-science brigade have reacted.

titan, a moon of saturn is covered in hydrocarbons. IT HAS LAKES OF METHANE!!! think ava-TAR but with out blue people. let's build space ships and go get it. no! wait! i mean let's spend trillions of dollars on jet fighters and missiles and tanks and atomic submarines and white phosphorus and "depleted" uranium. yeah, let's do it!

Just got my annual love letter from Blue Cross. We are presently covered by wife's insurance with her job, but I have always carried a backup high deductible policy, in case she wasn't working (and COBRA doesn't last forever). In any case, the monthly premium for the $5,000 deductible backup policy (which only covers 75% of expenses after the deductible) is going up from $385 (for the two of us) last year to $457 this year, a 19% increase. Unfortunately, being on the wrong side of 50, we are in preexisting condition land, and we are stuck with this policy.

re: for men
During our 4 day power outage, my wife was much better at networking with friends and neighbors for mutual assistance. I was much better at heavy physical labor such as sawing out down trees and clearing snow, as well as tasks requiring mechanical cleverness such as hooking up the inverter to run a couple of lights. For men not totally attached to a job, peak oil could bring back some of the traditional sex roles, reinforcing mens' self esteem.

Around here, it seems the men organize the community stuff in an emergency. Which does not absolve them from heavy physical labor and mechanical cleverness. A good bit of the community stuff is organizing the physical labor! I speak from years of experience :-)

But seriously, in a situation such as a big storm or flood or whatnot, the traditional role is that the woman manages what goes on inside the home, the man deals with managing the coordination of labor to help whoever needs helping, etc.

Again, I speak from years of experience. No self esteem problems, for either gender, that I can see.

Ouch wt! That sure is a scary looking chart. Why don't they put that on CNN and have some quick talking broadcaster do that bit with the screen that moves when they move their hand, and then isolate the part of the chart that is exponentially rising to the sky and enlarge it with a sweep of the hands - don't worry I won't hold my breath waiting for that to happen.

Also, something odd is going on with the stock market. The Dow was in the 10700's and after 6 down days out of 9, it's at 10120. This downtrend occuring at the conclusion of January is an ominous sign, because historically as January goes so goes the rest of the year.

In addition the same trend picture appears on each of the bond yield charts of every country that has gone into defacto default on it's debt and as we have noted before there are several more in the queue. Greek CDS and Bonds are sitting right near where Dubai was before they were reprieved.
Iceland, Dubai, Greece, UK ...

(Americans should take little comfort in the fact than their bond market and the dollar periodically strengthens on the back of each of these new revelations (investors scurry around to relative safety and they scurry away again just as fast), as sure as the day is long, our turn is coming) It's gotten bad enough now that even the Wall Street cheerleaders are taking refuge.

I hate to say it. The American economy is dying. Someone around here has been urging us to learn how to live on less, maybe a whole lot less, and that advice is looking more sound with each passing day. BTW thanks.

Well, there already are many foreclosure sales underway. Here's the listings for 126 form the Washington Post. And the banks are still trying to dump the real estate from preceding foreclosure sales...

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“To be thrown upon one's own resources, is to be cast into the very lap of fortune; for our faculties then undergo a development and display an energy of which they were previously unsusceptible.”